The importance of Indigenous economic reconciliation

Lisa Raitt: Thank you for tuning in to The Raitt Stuff. I’m your host, Lisa Raitt. And in this podcast, I’m going to share insights on current hot topics in the areas of public policy, politics and business with some guests along the way. And welcome back to The Raitt Stuff. I have a very special guest today. One of the key topics that you’re hearing about, not just in resource but in general business, is how do we make sure that as a society, we’re doing all we can for indigenous economic reconciliation? It was part of the report and the recommendations a couple of years ago from the federal government. And as a result, many of you already implement these kinds of policies within your corporate framework. Today, we’re going to talk about a specific aspect of indigenous economic reconciliation, and that is ensuring that there is availability of competitive equity for indigenous nations to invest in projects that they’re interested in. A lot of the times we talk about resource only, however, there’s many other sectors that are also interested in having economic participation from indigenous groups. And my special guest today, I know him as Chief Billy, who is also Chief Billy Morin Nahtokitopi, Sacred Rider who was elected in 2015 as the youngest chief in Enoch Cree Nation’s modern history, serving successfully three consecutive terms. Chief Billy has been a strong advocate for working together in all sectors with Canadians, as was the original spirit and the intent of treaty six. He’s had lots of business successes for the Enoch, about $1 billion during his time as chief, and that includes commercial development, carbon capture, gas power projects and unprecedented community infrastructure investment that also helped end a long term drinking water advisory. It really is his leadership that helps to build bridges, and as a result, he was recognised and appointed as Grand Chief of the 17 First Nations of the Confederacy of Treaty 6 in 2020. Today, Chief Billy is a Managing Director at Axxcelus Capital Advisory, which is dedicated solely to championing indigenous equity, ownership and resource projects. And he’s on the board of Energy for a secure future. So welcome Chief Billy, thank you so much for joining me here today on The Raitt Stuff.

Chief Billy Morin: Miyagi Sagao Lisa, happy to be here today.

Lisa Raitt: Delightful. We’re going to jump right into it. You recently were quoted in mainstream media as talking about indigenous engagement is key to Canada’s energy transition. Totally agree with you. Tell me a little bit more about how we can do better and provide that action behind indigenous engagement.

Chief Billy Morin: I think Canada gets it right now. The overall snowball is moving in the right direction when it comes to indigenous engagement in the energy transition. So I don’t think anybody has to be sold on. If you want to build a large infrastructure project, you should contact indigenous communities sooner rather than later. If you’re building cross provincial border project, you should contact indigenous nations sooner rather than later. And specific jurisdictions across the country with loan guarantee programs, you can help lower your risk and actually raise some capital with an indigenous partner. So I think the overall momentum is there, but it’s still there’s still a lot to be built on it. And what I would say is for more meaningful action here, I think we have to be more flexible to the indigenous needs across this country. I don’t think I have to tell anybody that this is ten provinces, three territories, three oceans and the second biggest land mass in the country. And for First Nations in particular, aside from even which is even more dynamic in Inuit nations up north. I mean, there’s 650 of us roughly, and they’re vastly different in languages. They’re vastly different in lands and their economic situations. A little bit of some of the stuff that’s been coming out with some of the loan guarantee programs have been a little bit too prescriptive, but I would like to see a little bit more flexibility in the narrative, rather than just saying that the nations can drive the transition and we have to include them as partners, but be flexible to their needs. So somebody in Alberta might want to be in the oil and gas sector, somebody in Newfoundland might want to be in the clean hydrogen sector, somebody in B.C. might want to be in the natural gas sector and everywhere across Canada might want to be in the solar or hydro in Manitoba. So I think we have to build that flexibility in to recognise that indigenous nations are vastly diverse, and we have to take a kind of project by project rather than being prescriptive, whether you’re industry, whether you’re big finance in Toronto, whether you’re provincial or federal or municipal governments just recognise that diversity is there and we have to be flexible towards it.

Lisa Raitt: Yeah, I really appreciate that overview. Drilling down, you co-led the first Alberta Indigenous Opportunities Corporation project and that was Cascade Power Project for Enoch and for the other First Nations. How difficult was it going first?

Chief Billy Morin: I wouldn’t call it difficult. It was kind of a call to action. I had a great relationship with former Premier Kenney. I have to give him kudos for starting that program. I was surprised to learn, too, that it wasn’t the first provincial loan guarantee for indigenous nations. Just recently. I mean, Ontario has actually had this since like 2010, roughly 12, 15 years ago, maybe even that long ago. Alberta, obviously, I think would say that. We want indigenous nations to participate in large equity projects. But, you know, there really wasn’t that kind of tool to launch them into the stratosphere of saying, we just don’t want the porta-potty contracts or you don’t want the clear cutting contracts. We need them to be owners. Ownership is obviously not a silver bullet to consultation, but it’s a pretty good tool in your repertoire to use to get these over for the greater good for everybody, Albertans and Canadians as a whole. So, you know, kudos to Premier Kenney and what he did and for that particular project. You know what I would say? The nuance where maybe non-Indigenous entities or the proponents themselves don’t have a lot of experience in and quite frankly, they’re not going to. Going forward, the indigenous nations have to take responsibility of working with themselves. So that was six nations, three different linguistic groups. They were roughly 100km apart. Certainly they had a pre-existing relationship in terms of governance and uniting against governments historical injustices. But this was a $93 million transaction amongst those six nations who’ve never done that level of business before. So it was a true challenge of internally getting the nations to work together in an unprecedented way. And I find that that might be a challenge that maybe proponents government and industry don’t see. But the nations themselves have to take that responsibility to treat this as a business transaction, balance it with indigenous rights and title and their historical rights and place in the economy. But again, these are business transactions. They have to find that balance internally.

Lisa Raitt: Yeah, a key nuance for a lot of projects to for folks to remember, especially when you’re used to thinking about private equity. The question is oftentimes, you know, what’s my exit strategy from a project? In First Nations, my understanding from Chief Terry Paul, who you know as well, you invest for seven generations. So these are things that you’re going to hang on to for a long period of time.

Chief Billy Morin: Yeah, absolutely. You know, whether it’s commercial or even I’ll highlight gaming. I mean our our competition is actually international or out of province. And when we talk about gaming here in Alberta, I talk about it like when we talk about the regulatory regime and investing back into the nations, we share with every First Nation, 44 of them in Alberta. That money is staying in Alberta. It’s not going to a different board and a different province or quite frankly, a different company originating outside of even the Canadian border. So we’re here to stay. I think it’s beneficial for Canada to recognize that the investment stay in Canada, and they circulate for seven generations and quite frankly, for years to come right off the hop.

Lisa Raitt: Yeah. Now, right now, the way it’s structured, both the AIOC, Alberta Indigenous Opportunities Corporation and I believe the Ontario one, there isn’t actually ability for something like you just mentioned gaming, for example. The mandate is not in there. They can’t go for a loan guarantee if a First Nation decides they want to purchase a gaming activity.

Chief Billy Morin: No. Alberta is heavily dedicated to energy and the natural resource sector. I don’t have all the details in front of me of Ontario’s, but obviously that’s what it’s going to be focussed on as well, you know, and I appreciate that the snowball is moving really, really quick. I put myself in government shoes. They’re there to take care of all Canadians, the public purse. And if you’re going to put the public purse on a loan guarantee for something really, really new, I get the the high risk view that would they would take. But I’m really happy to say that the the snowball is moving that quick where we can see this moving into other sectors. The provincial government of Alberta has said we can do it in health. We can do it in tourism, we can do it in agriculture. We can do it in multiple other sectors. Let us just work out the details sooner rather than later and getting it done. So it’s moving in the right direction.

Lisa Raitt: That’s really heartening to know. And loan guarantees just for folks who who may not understand the intricacies of it, give us the thumbnail sketch of why a loan guarantee is important at the end of the day.

Chief Billy Morin: Loan guarantees are important, particularly to First Nations, Métis communities, Inuit communities. I’ll highlight First Nations because that’s obviously the one that was chief of. And under the Indian Act, systematically, we cannot leverage our land. We cannot even build a house without formally asking the minister to to build a house on the reserve. So still in Canadian law to this day, we are systematically excluded under the Indian Act to leverage our assets to loan against. Now there is mechanisms, but they’re really heavily regulated. The nuances between that and outside of our borders on the reserve are they do exist, but they’re so cumbersome, they take even years to just build a commercial development. And we have to go to Ottawa to get a gas store up. So loan guarantees help shorten that. I would say less on the reserve, but in particular our traditional territories are, quite frankly, all of Canada or all of central Alberta into Saskatchewan. And we want to participate outside of our reserve for large projects. So the loan guarantees allow us to expand our economy beyond just that little four by five mobile box that is Enoch, and into these larger projects like the Cascade Energy Project for $93 million into a $1.5 billion plant where we are a minority owner, but we also reap the benefits of all those traditional territory resources coming back into our small nation.

Lisa Raitt: So you mentioned the Indian Act as being a barrier, a main issue for an indigenous community who’s trying to access financing to get deals done. Anything else out there that you can highlight for those of us who are following along with this.

Chief Billy Morin: I think energy sector gets it, and I would just love to see whether it’s health care. I mean, I’m pretty proud that my nation just partnered. It’s under construction right now to build a surgical facility in partnership with the provincial government, but it’s just those other industries. I think we get why indigenous nations are highlighted in the energy sector, in the natural resources sector, and land is by far one of the most important, if not the most important thing to us, but those other sectors that are maybe not derived from land. I’d like to see a more diverse inclusion and that snowball again effect kind of taking up in health or in AI or in the tech sector. So I hope those companies and those proponents really kind of take notice in the energy sector and look to indigenous nations. It’s just time, I would say is a barrier.

Lisa Raitt: Okay. And what would be your advice to a company out there who’s not in the energy sector? Because you point out very correctly, energy and mining have been doing this for many, many, many years, multiple years because it’s the area in which they have their resources. But there may be some other companies who do want to partner on AI or something that is not traditional to your territories. What would be the advice that you would give to a company who wanted to engage with an indigenous community?

Chief Billy Morin: I’m involved in a project in actual AI ML out here. It’s really, really early days and they’re looking to solve wastewater and water treatment plant operation efficiencies in rural communities, and they have no idea where to reach out. But obviously, in the headlines, they read that indigenous communities are getting heavily invested into ending these long term water boil advisories. And they recognize that there was an opportunity to partner and to prove their technology out in AI and ML to make the water treatment plant more efficient, more economical and quite frankly, more safer for the community. The advice I can give is nations are waiting for you. They’re waiting for you to approach and never be too shy to just, I wouldn’t say just walk in the front door at the local band office, but somebody knows somebody, and increasingly we’re involved in every sector and just never be too scared to reach out because there’s uniquely indigenous programs, whether it be federally or provincially, that will allow your company to thrive and prove your project out if it’s a greenfield project.

Lisa Raitt: That’s excellent advice, Chief Billy. I think a lot of people are going to appreciate that, or a lot of people are now going to call me asking if they can talk to you one or the other, just to close out on on our conversation today, can you give us an idea of projects that are leading the way? What are you working on at Axxcelus? What’s exciting?

Chief Billy Morin: Yeah, so we’ve recently done Canada Infrastructure Bank. They’ve done a solar project with our company with the Stoney Nations and Treaty 7, we’re looking at a battery powered project to to back up the grid here in Alberta with a large provincial, quite frankly, national proponent with the indigenous nations. And that’s looking to go to FID here in about a month or two. And that’s one of the first battery large battery projects. I know there was one in Ontario. We’re doing work across the country in multiple sectors, and it’s in the transition. It’s in traditional assets in oil and gas energy. So this has got to be the most exciting space to play when it comes to I think Canadians out there right now are looking just to do something different. It’s a new generation of leadership. It’s 2023 and we’re looking for something a little bit new. And the leg of something new has got to be indigenous inclusion in the economy. And there’s just so many phone calls to take that this is blowing up right now in a good way.

Lisa Raitt: Yeah I agree. And you know what I heard JP Gladue speak about six months ago and something that he said that really has stuck with me. And that is it’s not only indigenous participation, it’s indigenous leadership in a lot of sectors. Because like yourself, there’s a lot of First Nations out there who have capacity and basically have done more deals, quite frankly, than some companies have.

Chief Billy Morin: Yeah. The one I would highlight selfishly. So forgive the listeners out there if I sound like I’m pumping tires too much. But I was in Toronto talking about a private versus public health care debate a week ago, and the number I just kept throwing out there was pre and post-operative outcomes for indigenous peoples. And many studies is 25% higher mortality rate than the average Canadian. And so for me, it’s less about the debate and more about let’s stop the insanity and do something different. At least try. And so, you know, I’m really proud that our nation and they’ve kept it going since I’ve left as the formal sitting chief, is building a charter surgical facility, the first one on reserve to serve all Canadians and Albertans. And, you know, it’s less about the debate and more about let’s do something about the actual structure, which is probably needs to evolving and is not working in a lot of ways in terms of getting surgeries done for indigenous peoples. And just, you know, we can’t keep doing the same thing and expecting different results. And it took our nation to just to take the risk and step out in front and say, we’re ready to partner with everybody, including provincial government, and private proponents.

Lisa Raitt: And thank you for mentioning that one. It’s not pumping your tires at all, because that was the project that caused me to search you out. If you recall, that’s the one where I said, I really need to talk to you, because I thought it was just so exciting getting into that space and making sure that the outcomes are good for not only Albertans, but specifically for that terrible statistic that you just brought up in terms of successful treatments.

Chief Billy Morin: Yeah, I’m just glad that the nation, my chief and council I’m really proud of are just keeping it going. So kudos to them.

Lisa Raitt: Well, kudos to you, Chief Billy. You’ve done some remarkable work and because you’re so young, I’m expecting great things from you in the future. And I look forward to helping any way I can, either through CIBC or through other means. So best of luck and looking forward to watching your future successes.

Chief Billy Morin: Thank you Lisa, and just glad to be on the platform here. You know, I do a lot of speaking engagements, but I was just saying to the team over there, this is my first podcast, so thank you for having me on my first podcast platform. Looking forward to sharing it with Canadians.

Lisa Raitt: Thanks so much for tuning in. Now, if you have any questions or comments or even requests on topics to discuss, drop me a line at [email protected]. Your interactions actually will make this better. I’m your host, Lisa Raitt, and this has been The Raitt Stuff.

Disclaimer: The materials disclosed on this podcast are for informational purposes only and subject to our Code of Conduct as well as IIROC rules. The information and data contained herein has been obtained or derived from sources believed to be reliable, without independent verification by CIBC Capital Markets and, to the extent that such information and data is based on sources outside CIBC Capital Markets, we do not represent or warrant that any such information or data is accurate, adequate or complete. Notwithstanding anything to the contrary herein, CIBC World Markets Inc. (and/or any affiliate thereof) shall not assume any responsibility or liability of any nature in connection with any of the contents of this communication. This communication is tailored for a particular audience and accordingly, this message is intended for such specific audience only. Any dissemination, re-distribution or other use of this message or the market commentary contained herein by any recipient is unauthorized. This communication should not be construed as a research report. The services, securities and investments discussed in this report may not be available to, nor suitable for, all investors. Nothing in this communication constitutes a recommendation, offer or solicitation to buy or sell any specific investments discussed herein. Speakers on this podcast do not have any actual, implied or apparent authority to act on behalf of any issuer mentioned in this podcast. The commentary and opinions expressed herein are solely those of the individual speaker(s), except where the author expressly states them to be the opinions of CIBC World Markets Inc. The speaker(s) may provide short-term trading views or ideas on issuers, securities, commodities, currencies or other financial instruments but investors should not expect continuing analysis, views or discussion relating to those instruments discussed herein. Any information provided herein is not intended to represent an adequate basis for investors to make an informed investment decision and is subject to change without notice. CIBC Capital Markets is a trademark brand name under which Canadian Imperial Bank of Commerce (“CIBC”), its subsidiaries and affiliates provide products and services to our customers around the world. For more information about these legal entities, as well as the products and services offered by CIBC Capital Markets, please visit www.cibccm.com.